When Structure Stops Matching Volumes

Platform Restructuring After Market Disruption

1. Business Context

The group operated a digital platform connecting customers with owners of physical assets available for short-term commercial use.The platform itself was fully online: listings, bookings, and payments were processed digitally, while the use of assets took place locally.

The parent company was registered outside the EU.Over time, the group established several local operating subsidiaries in different European jurisdictions, including France, the UK, and Germany.

Each local company:

• maintained its own office,

• employed local staff,

• and supported platform operations in its respective market.

This structure reflected a period of rapid expansion and strong local demand.

2. The Challenge

A sudden change in market conditions led to a significant decline in activity.

Demand dropped sharply, while fixed costs across multiple jurisdictions remained high.The group was forced to reassess its operating model under pressure.

Key challenges emerged simultaneously:

• multiple local entities created high administrative and compliance costs,

• duplicated functions across countries became inefficient,

• consolidating financial and operational data was increasingly complex,

• and maintaining substance in several jurisdictions was no longer justified by revenue.

The issue was not compliance failure, but structural rigidity.The existing setup had been designed for growth, not for contraction or flexibility.

3. Client’s Request

The client did not seek short-term tax savings.

Their priorities were:

• simplifying the group structure,

• centralising platform operations,

• maintaining EU-compliant revenue collection,

• and creating a model that could operate efficiently with a reduced physical footprint.

They needed a jurisdiction that allowed:

• digital management,

• centralised revenue flows,

• and operational flexibility without adding unnecessary tax pressure.

4. Structural Solution Using Estonia

The group decided to consolidate platform operations into a single EU operating entity in Estonia.

As part of the restructuring:

• local operating subsidiaries were gradually closed,

• operational functions were centralised,

• and teams transitioned to a remote working model managed from one jurisdiction.

The Estonian company became responsible for:

• collecting platform fees from EU customers,

• reporting VAT on electronic services under the OSS scheme,

• and managing day-to-day platform operations digitally.

Estonia was chosen due to:

• its digital corporate environment,

• EU-wide VAT reporting through OSS,

• and the ability to retain profits within the company without corporate income tax on undistributed earnings.

Local taxation remained applicable where physical activity continued, but core platform operations were clearly centralised.

5. Outcome

The restructuring resulted in:

• a significantly simplified group structure,

• reduced administrative and compliance overhead,

• centralised EU revenue collection,

• and improved operational flexibility.

The platform model did not change. What changed was how and where the business operated.